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Priorities for Global Treasury Teams

Survey reveals a disconnect between CEOs, CFOs, and treasurers regarding how much treasury activities need to improve.

A recent survey of corporate executives conducted by SAP and CFO Research provides some interesting insights into global businesses’ priorities for their treasury function. The survey included 661 executives, all at companies with more than $500 million in annual revenues. Eighteen percent of respondents said they are CFOs; 18 percent are directors of finance; 15 percent are treasurers; and 11 percent are CEOs or other business managers.

When the survey asked these participants to select their three most important priorities for improving treasury performance, their top two choices are not surprising: optimizing treasury processes (44 percent) and upgrading treasury information systems or technology (38 percent). Nearly a third also prioritize improving the treasury function's ability to work closely with line-of-business managers. However, fewer than a quarter of respondents are focused on improving treasury performance by expanding or adding treasury services, or by adjusting treasury staffing levels. (See Figure 1.)

The survey also asked participants how much improvement they need to make in specific treasury activities. Again, respondents highlighted the need to beef up their treasury information systems. Overall, more than three-quarters said their company needs to improve its treasury software. Other areas in which the vast majority of participants said their company needs to do better: improving the accuracy of its cash flow forecasts (75.9 percent), improving connectivity with third parties' information systems (72 percent), improving yield on liquid assets (70.3 percent), and strengthening the company’s liquidity position (69 percent). Respondents placed lower priority on reducing costs, either in their internal treasury function or in their dealings with third parties, such as banks. (See Figure 2.)

The survey results become even more revealing when responses are divided by job title. It’s true that similar proportions of CEOs, CFOs, and treasurers said their treasury information systems need significant improvement. However, when it comes to activities related to growth, much larger proportions of business executives see room for improvement than do finance managers. For example, more than twice as many CEOs as treasurers think their company needs to substantially boost its liquidity. Twice as many CEOs as CFOs think the company needs big improvements in connecting with information systems of third parties. And CEOs are about twice as likely as either CFOs or treasurers to think the company needs to make significant progress in either optimizing internal funding across national borders, or in reinvesting cash in the business. (See Figure 3.)

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